Luxury Real Estate: Thinking of a Toronto Condominium Purchase?
As an alternative to home ownership, many people are now looking to condominiums for a variety of reasons, chief among them being affordability, turn-key features and location.
Based on what I have seen in the entry-level condo market, I think it’s important to discuss that although condos are lower maintenance than a detached home, they, like all investments, do require some care and maintenance.
Whether you live in a condo or a house, when you own your property, you do need to invest in it. It’s important to know that a condo owner is responsible for all maintenance within the unit and that the condo corporation only maintains the common elements.
Some regular maintenance problems I have come across when showing condos…
- Most condo units have a heat pump within the unit. It can either be owned or rented, and you should make sure you are clear on which it is when you are buying. A rented unit can become another cost in addition to the maintenance fees. Either way, the heat pump needs a service call every six months to have the filter inspected and cleaned so that it continues to work properly. If you have done any pre-move-in construction there may be a lot of dust clogging the filter. Mark on your calendar the times you need to get this inspected! The cost of the service call will always be less than the cost of major repairs.
- Make sure you clean your dryer ducts from time to time and always be sure to empty the dryer filter after each use.
- In a condo, your appliances are a big part of the investment. Be sure to clean them regularly and try not to ding them up. Poorly maintained appliances will devalue your unit.
- Bathroom tiles need cleaning regularly or calcification can occur, doing irreparable damage to them. If you are too busy, a bi-weekly cleaning service would be a prudent way to protect your investment.
- Kitchen drains are not designed for grease to be poured down them! This could cause grief in your entire building. Make sure grease goes into a can and is thrown in the garbage rather than dumped down the drain.
- Windows on your balcony are not always cleaned by the building’s semi-annual window cleaning as they are considered “exclusive use”. Take the time to clean them seasonally or as dirt accumulates.
- Be respectful of the common areas. Part of your condo unit investment depends on a clean and pristine common area. Treat the common areas as you would your own space. I have been in condo buildings just a few years old with deep stains in the carpets. That will ultimately add to your maintenance costs as carpets will need replacing ahead of schedule.
If you notice a maintenance issue in a common area, let your building management know as soon as possible so that the issue can be quickly remedied.
Things you need to know when investing in a condo…
- Who was the builder? Are they reputable? Ask people who have bought units in the building or another building constructed by the builder.
- Is Airbnb, or any form of short term rental, allowed? Unless you are an investor, you want to make sure that Airbnb is not allowed. A minimum 6-month lease term would be ok, but 1-year is preferable. Short term rentals generally just add wear and tear to a building.
- What is the actual size of the unit? Make sure you understand how they have calculated the measurements. Builders have been known to take creative license, by including things like an outdoor space for instance, measuring from the interior wall.
- Do you want to buy pre-construction or re-sale? This is tricky. There are benefits to buying straight from the builder in terms of price and having the opportunity to choose your finishes. You have to be quite savvy in reading plans and understanding exposure, however. Currently, construction costs have risen to the point that the value in buying pre-construction has diminished and you can actually find re-sale for less. If your priority is brand new, however, then pre-construction is the only way to go. Just be prepared to have occupancy dates change due to construction delays. You are less likely to experience delays with a more experienced builder, but they do happen.
- What exposure is best? Southwest gives you the lightest and brightest spot but you have to look as what is being built nearby. Is there a chance a new building will be constructed and take the light? North views in this city are actually lovely, frequently with nice ravine vistas. The indirect light is easier on your artwork and upholstery too.
- Do you want a large high-rise or a boutique building? If you want views, there is no doubt a high-rise is the way to go. One caveat about high-rise buildings is the possibility of lengthy elevator wait times. Ask the concierge about this or go view the unit at 5pm to see how busy it is. Boutique buildings offer a slightly quieter existence and, if they are a little older, can provide much larger units on a price-per-square-foot basis.
- With every condo purchase there is a Status Certificate that provides a rundown of the building’s financial statements, a review of the individual unit and a summary of the rules and regulations. A very important thing to know, for example, would be if the building allows pets and if they do, what are the restrictions?
- Older buildings tend to offer more generously-sized units and for a lower price per square foot, however they also have higher maintenance costs. It will take a little number-crunching to decide if the large size is worth the additional maintenance fees.
- It is easy to get wooed by the fancy ammenities in new buildings. Gyms, pools, rooftop decks with BBQs, pool tables, screening rooms, sound studios, craft rooms, meditation rooms, guest suites, squash and racquetball courts, yoga studios…and the list goes on! A purchaser has to think long and hard about what value those amenities provide, and, more importantly, if they will use them. Also think about whether those amenities will require a refresh, update or repair in 5-10 years, which directly affects maintenance fees and/or whether an assessment is required.
- There are many small condos created from converted churches and old mansions in Toronto neighbourhoods that provide a unique condo experience that feels more like a home. Before stepping into a cute small condo building situation, however, make sure you meet the neighbours and feel comfortable that you all will make good business partners, because if there are a mere four units in a building, that is exactly what you will be.
- Parking. How important is it downtown? I always say having a designated owned or exclusive-use parking spot is very important for resale. New developments are now allowed to build without providing parking for all units. The trend is for walkability and leaving the car out of the model. Based purely on supply and demand, a coveted parking spot will only go up in value. If you are a true environmentalist and don’t want a car, that spot can be rented to someone within the building, but make sure you know the parking rental rules first.
- Downsizers, if you are considering making a shift from your suburban home to a city condo make sure you get a feel for the neighbourhood and condo life before taking the plunge. There are many cool neighbourhoods in the downtown core but giving up a large lot, a wide driveway and lots of outdoor space is a big change! Test it out by staying in a hotel for a few days in the neighbourhood you are considering, do the math on the annual maintenance and tax costs and compare that to the costs of running your current home. Also understand that a downsize to a condo is exactly that if your plan is to take money out of the market. Go visit a few spaces to determine what square footage you are comfortable with. If you are buying based only on floor plans, ask to see some re-sale condos of similar size to make sure you can live with the space.
- If you view a condo that is in disrepair or just plain dirty it could be an opportunity to get the unit for a good price. It is not that expensive to get cabinets re-painted or to change out hardware or even update a countertop. A few minor improvements combined with a good industrial cleaning can enhance the appeal and value of a condo.
- When buying a condo many people don’t think it’s worth getting a home inspection done, but I disagree. At a minimum, they will walk you through to show you how things work in your unit. They will also notice things even a keen buyer may not, such as moisture or electrical panel issues. Sometimes builders do things like double-tapped wires when they are in a rush to finish. I agree it can be hard to find time for an inspection in this fast-paced market but it will be helpful in the long run, especially for a first-time buyer.
Toronto condominium life is here to stay and is growing steadily! Condo sales are the most active part of the market right now, based mainly on affordability and convenience. They are a great option, but make sure you do your due diligence!
If you are interested in looking into a house in the sky, or even one a little closer to the ground, don’t hesitate to contact me.
Helen Braithwaite, Sales Representative Chestnut Park Real Estate Limited, a Christies Real Estate Affiliate. cell 416-561-3114 office 416-925-9191
Luxury Real Estate Specialist. Chairman’s award 2018